EPFO - Finance Ministry has approved 8.65% rate of interest on Employees Provident Fund (EPF) for 2018-19

EPFO - Finance Ministry has approved 8.65% rate of interest on Employees Provident Fund (EPF) for 2018-19

The Finance Ministry has approved 8.65% rate of interest on Employees’ Provident Fund (EPF) for 2018-19 as decided by retirement fund body EPFO, benefitting more than 6 crore formal sector workers.

“The Department of Financial Services (DFS), a wing of Finance Ministry, has given its concurrence to Employees Provident Fund Organisation’s (EPFO) decision to provide 8.65% rate of interest for 2018-19 to its subscribers,” a source privy to the development told PTI.

“The DFS has approved the proposal subject to fulfilment of certain conditions related to efficient management of the retirement fund,” the source said further.

Earlier in February, the EPFO’s apex decision making body Central Board of Trustees headed by labour minister Santosh Gangwar had decided to raise the interest rate on EPF to 8.65% for 2018-19, which was the first increase in the last three years.

The interest rate on EPF was hiked to 8.65% for the last fiscal from 8.55% provided in 2017-18. The EPFO had earlier reduced the interest rate in 2016-17 to 8.65% from 8.8% in 2015-16.

After the Finance Ministry concurrence, the Income Tax Department and the Labour Ministry would notify the rate of interest for 2018-19. Thereafter the EPFO would give directions to its over 120 field offices to credit the rate of interest into subscribers’ account and settle their claims accordingly.
According to the EPFO estimates, there would be a surplus of Rs.151.67 crore after providing 8.65 per cent rate of interest for 2018-19 on EPF. There would have been a deficit of Rs.158 crore on providing 8.7 per cent rate of interest in EPF for last fiscal. That is why the body decided to provide 8.65 per cent rate of interest for 2018-19.

The EPFO had provided a five-year low interest rate of 8.55% to its subscribers for 2017-18.

PTI

Newly Launched Atal Bimit Vyakti Kalyan Yojna to Benefit More Than 3 Crore Insured Persons

Ministry of Labour & Employment
Newly Launched Atal Bimit Vyakti Kalyan Yojna to Benefit More Than 3 Crore Insured Persons

26 SEP 2018

Around 3.2 crore Insured Persons (IPs) will benefit from newly launched scheme of ESIC 'Atal Bimit Vyakti Kalyan Yojna'. The ESI Corporation has approved 'ATAL BIMIT VYAKTI KALYAN YOJNA' for Insured Persons (IP) covered under the Employees’ State Insurance Act, 1948. This scheme is a relief payable in cash directly to the Bank Account in case of unemployment and while they search for new engagement. The cash benefit given to the unemployed persons searching for new employment will be 25 percent of his average earning of 90 days. Shri Gangwar was addressing on the occasion of 7th National Conference on Security and Safety at Workplace and distribution of Safety Systems Excellence Awards in New Delhi today.

Addressing the function, the Minister added that there are around six crores of workers in organized sector who are getting benefits of EPFO, ESIC and Social Security Schemes. The Union Government has taken many steps to enhance their working conditions, safety and social security in order to improve their standard of living. Present government is continuously making efforts to improve life conditions of around 40 crore workers of the unorganized sector also. In last two years nearly one crore workers have been linked with ESIC benefits and more than one crore have been brought in the fold of EPFO. Pradhan Mantri Jeewan Jyoti Beema Yojna and Pradhan Mantri Suraksha Beema Yojna  are totally free for unorganized workers. He further said that nearly 3 crore workers are benefitting from these Social Security Schemes.

The honorarium of 14 Lakh Aanganwadi workers have been increased from Rs. 3,000 per month to Rs. 4,500 per month. Likewise, honorarium of Aanganwadi helpers has also been increased from Rs. 1,500 to Rs. 2,250 per month. The incentive of AASHA workers has also been doubled, he added.

Shri Gangwar further said that the Ministry is making efforts to increase employment opportunities through Pradhan Manrti Rojgar Protsahan Yojana. Twelve per cent of the Employees' Provident Fund (EPF) contribution of new employees is being given by government so that employers may not have to bear this cost. The government has spent Rs. 1,744 crores for this EPF contribution for around 72 Lakh employees of nearly 87,000 organizations in last two years.

The Minister congratulated all the winners of Safety Systems Excellence Awards and expressed hope that all the participants of this conference will gain from the ideas discussed on this forum.

PIB

Insurance of Rail Passengers

Ministry of Railways
Insurance of Rail Passengers

01 AUG 2018

An Optional Travel Insurance Scheme was launched w.e.f 01.09.2016 for the Confirmed/RAC Railway passengers who book e-ticket through official website of Indian Railway Catering & Tourism Corporation (IRCTC) portal at the premium of Rs. 0.92 per passenger. Under the scheme, sum assured is paid to the victim/family or legal heir of the victim as the case may be in case of death/injury of reserved passengers due to train accident/untoward incidents as defined under section 123 read with Sections 124 and 124A of the Railways Act, 1989, subject to the qualification that the coverage will be valid from the actual departure of train from the originating station to actual arrival of train at the destination station including 'process of entraining' and 'process of detraining' the train.

Subsequently, to promote digital/cashless transaction, insurance is being provided free of cost from 10.12.2016 to all the Confirmed/RAC Railway passengers buying online ticket from IRCTC and no premium is being charged from the passengers.

The sum assured to be given to victim/family or legal heir of the victim are as follows:-

(i) In case of Death- Rs. 10 lakh,
(ii) Permanent Total Disability - Rs.  10 Lakh,
(iii) Permanent Partial Disability upto -  Rs.  7.5 Lakh,
(iv) Hospitalization Expenses for Injury - Rs.  2 Lakh,
(v) Transportation of mortal remains - Rs.  10 Thousand.

IRCTC which is a wholly owned undertaking of Ministry of Railways has entered into an agreement with three Insurance Companies through Limited Tender, namely (i) Shriram General Insurance Company Ltd., (ii) ICICI Lombard General Insurance Company Ltd., & (iii) Royal Sundaram General Insurance Co. Ltd..

Compensation liability of Railway for death or injury of Railway passengers in train accidents and untoward incidents is laid down in Section 124 and 124A read with Section 123 of Railways Act, 1989. The amount of compensation is Rs. 8 Lakh in case of death and Rs. 64000 to Rs. 8 Lakh in the case of injury, depending upon the gravity of injury.

The insurance scheme is available to passengers of all reserved classes (SL, 1AC, 2AC, 3AC) of all trains (except passenger trains & sub-urban trains) for only tickets booked online on the IRCTC websites. Passengers booking reserved tickets through the manually operated Railway reservation counters and those travelling on unreserved tickets are not entitled to avail of this insurance scheme.
This information was given by the Minister of State of Railways, Shri Rajen Gohain in a written reply to a question in Lok Sabha today
PIB

EPFO Rate of Interest

EPFO Rate of Interest
The declared rate of interest on Employees Provident Fund (EPF) paid to the subscribers during the last three years is as under:

Year	Rate of Interest (in per cent.)	Date on which Rate of Interest declared
2014-15	8.75	23.01.2015
2015-16	8.80	23.05.2016
2016-17	8.65	24.04.2017

The interest rate on EPF is determined by the Central Government in consultation with the Central Board. The Central Board of Trustees (CBT), Employees Provident Fund (EPF), in its meeting held on 21.02.2018, has recommended 8.55 per cent. rate of interest to EPF subscribers for 2017-18. The proposal has now been sent to the Ministry of Finance for their concurrence to the interest rate of 8.55 per cent to the EPF subscribers for the year 2017-18.

Approximately 19,97,84,374 number of accounts of account holders are likely to be credited with the statutory rate of interest declared for the year 2017-18.

This information was given by the Minister of State for Labour and Employment Shri Santosh Kumar Gangwar in a written reply to a question in Lok Sabha on 19.3.2018.

Aadhaar linking and interoperability of General Provident Fund (GPF), Public Provident Fund (PPF) and Employees Provident Fund (EPF)

Aadhaar linking and interoperability of General Provident Fund (GPF), Public Provident Fund (PPF) and Employees Provident Fund (EPF)

No.CAIU/011(44)2016/Aadhar/10273

Date: 22 SEP 2017

To
All ACCs (Zones) including ACC (ASD),
All RPFC-I/ RPFC 11 (Regional Offices),

Sub: Aadhaar linking and interoperability of General Provident Fund (GPF), Public Provident Fund (PPF) and Employees Provident Fund (EPF) -regarding.

Sir,
Please find enclosed herewith a letter No.D-11011/36/2016-DBT (Cab.) dated 29.08.2017 received from Assistant Director, Cabinet Secretariat, DBT Mission forwarding therewith record of discussions of the meeting held under the Chairmanship of Joint Secretary, DBT Mission on 25.08.2017, wherein it has been directed that all the Departments should ensure 100% of Aadhaar seeding by December 31,2017.

2. It is requested to implement the instructions issued by the Cabinet Secretariat, DBT Mission, New Delhi for seeding of Aadhaar by December 31, 2017.

[This issues with the approval of ACC-II (CAIU)].

Yours faithfully,
Encl: As above
(A.K. Mandal)

Authority: www.efpindia.com

EPFO: To hike take-home pay of employees, government plans to cut employers contribution to 10%

EPFO: To hike take-home pay of employees, government plans to cut employers contribution to 10%

Chief provident fund commissioner (CPFC) V P Joy told FE the matter is on the agenda and that the opinion of the CBT members would be sought.

In a move that will increase the take-home pay of employees, the government plans to prune employers' contribution to the employees' provident fund (EPF) to 10% from 12% currently. Sources said the proposal to trim employers' contribution, aimed at promoting formal employment, will be placed before the central board of trustees (CBT), the highest decision-making body of the employees' provident fund organisation (EPFO), at its meeting on Saturday.

Chief provident fund commissioner (CPFC) V P Joy told FE the matter is on the agenda and that the opinion of the CBT members would be sought. Joy denied the government was putting pressure on it to take up the matter with the CBT members. Apart from representatives from both the Centre and the states, CBT is represented by the employers' and workers' organisations including central trade unions.

This proposal is in line with the government's policy to extend social security benefits to all workers and at the same time ensure ease of doing business. "The labour ministry feels that by reducing the quantum of employer's contribution, it can persuade more units to extend the EPF benefits to its workers," a labour ministry official said. The EPFO currently has 4.15 crore active subscribers.

Under the present law, it is mandatory for units employing 20 or more persons to provide EPF benefits to workers. While employees contribute 12% of the basic pay to EPF, the employer contributes 8.33% towards the employees' pension scheme and 3.67% to the EPF itself.

Additionally, employers also pay 0.5% towards EDLI, 0.65% as EPF administrative charges and 0.01% as EDLI handling fee, taking the total contribution to 13.61%.

"It is to be condemned that the Centre's labour department has proposed a reduction in the employers' contribution to the EPF from 12% to 10% of the basic pay. While the government claims the rights of the workers will be safeguarded, this move to reduce EPF contribution of employers exposes the pro-corporate policies of the government and its only concern is "ease of doing business," said CITU General secretary Tapan Sen. AITUC's national secretary DL Sachdeva also said that the proposal would be protested at the meeting.

Vrijesh Upadhyay, general secretary, Bharatiya Mazdoor Sangh (BMS), the biggest trade union and affiliated to the RSS, said savings should rise proportionately with the income.

There has been discussion yet on whether the share of employees too will be lowered, sources said should it be decided that employers will contribute 10%. Driven by a policy to extend social security benefits to workers who are currently outside its ambit, the government was considering lowering employers' liability towards EPF in the construction sector to 10% of the basic pay from 12% now. Employers with some other sectors already get the benefit.

EPFO has, of late, been on a enrolment drive. Enthused by an encouraging response to its first three-month enrollment programme, through which over 30 lak new subscribers joined the scheme, EPFO extended the programme for another three months with effect from April 1.

Source: www.financialexpress.com

EPF pensioners to get medical benefits: Bandaru Dattatreya

EPF pensioners to get medical benefits: Bandaru Dattatreya

New Delhi: Nearly 58 lakh people Employees Provident Fund pensioners will now get medical benefits, Labour Minister Bandaru Dattatreya said in the Lok Sabha today.

"Regarding the pensioners, we are going to give the pensioners benefit under the ESIC (Employees State Insurance Corporation) to those who are retired pensioners. We will be providing all medical services to the retired pensioners. 58 lakh pensioners will be benefited," he said.

Dattatreya was replying to a debate on a private member's resolution moved by RSP member N K Premachandran on 'Steps To Ensure Welfare of Employees Provident Fund Pensioners'.

A meeting of the EPFO Board yesterday had on its agenda a proposal to provide health insurance scheme to pensioners of the Employees Pension Scheme through Employees State Insurance Corporation (ESIC).

Although the board agreed in principle to approve the proposal but a final call would be taken on this in the next meeting of the CBT.

Earlier, back of the envelop calculations done by ESI had estimated Rs 200 monthly premium per person for providing health cover under its scheme to the EPFO pensioners.

The proposal is aimed at providing health cover to EPFO pensioners, who get very little amount as pension and hence healthcare is out of their reach.

Hukum Narayan Yadav (BJP), while participating in the debate, demanded pension for farmers and agricultural labourers.

Participating in the discussion, Anandrao Adsul (Shiv Sena) said that unclaimed pension fund of around Rs 27,000 crore which has been deposited should be utilised for the people.

Ravindra Kumar Rai (BJP) said that Pandit Deendayal Upadhyay was of view that policies of the country should be according to the country and added the present government under the Chairmanship of Prime Minister Narendra Modi "we are leading the same direction."

Contending that the present government wants to spread the ray of hope for those who are suffering from destitute, Rai said "We are not working for the political intent but with social ethos."

He also suggested that in every district some amount should be kept aside for the needy which should be allocated to them when there is a need.

Pashupati Nath Singh (BJP) said the unclaimed fund of about Rs 27,000 crore lying with EPFO belongs to poor and it should be utilised to provide relief to the poor only.

Poor people due to lack of awareness or information about rules for drawal could not withdraw so it is lying unused with the the EPFO, he said.

Government has taken various steps to make India a pensioned society, he added.

Due to efforts of the government, the shift of PF fund from one organisation to other has become seamless, said Jugal Kishor Sharma (BJP).

PTI

7th Pay Commission - Employees Provident Fund may be raised to Rs 25,000

7th Pay Commission - Employees Provident Fund may be raised to Rs 25,000

Under the 7th Pay Commission minimum wage ceiling the Employees Provident Fund (EPF) is likely to raise to Rs 25,000 from the existing Rs 15,000.

The proposal drafted by Employees’ Provident Fund Organisation (EPFO) will be sent to the Union Government which is likely to be approved, the report suggests.

The decision has been taken by the members of Sub-committee of the Central Board of Trustees, EPFO - the highest decision-making body - on contract workers held on November 7.

According to reports, the EPFO has proposed a hike in the wage limit of all employees drawing basic salary Rs 25,000 would have to contribute to the provident fund. However, those government employees drawing above that limit will have the option to become a member of the provident fund and can have an option to select or reject if they want to.

The move taken by the EPFO comes in the wake of changes in the wage structure in accordance with the proposal of the 7th Pay Commission. Most of the trade union representatives at the CBT sub-committee meeting noting that the minimum wage of the Central government employees after implementation of the 7th Pay Commission report has been hiked to Rs 18,000, due to which the EPFO’s wage ceiling of Rs 15,000 needs to be altered.

The CBT pointed out that there could be a further increase in minimum wages from Rs 18,000 is likely with the trade unions demanding minimum wage to be increased at least Rs 21,000 to Rs 22,000.

In fact, the Employees’ Deposit Linked Insurance Scheme (EDLI) is directly linked to the minimum wage ceiling. At present, If an employee is earning up to Rs 15,000 he or she can avail of benefits under the Employees Deposit Linked Insurance Scheme (EDLI). The scheme provides life insurance of up to Rs 6 lakhs.

Source: FE

Confusion on EPF due to bad phrasing in Budget speech: Union Revenue Secretary Hasmukh Adhia

Confusion on EPF due to bad phrasing in Budget speech: Union Revenue Secretary Hasmukh Adhia

Union Revenue Secretary Hasmukh Adhia today defended the proposal to tax Employee’s Provident Fund withdrawals, saying the intention was only to encourage investment in pension schemes, but the phrasing in the Budget speech caused the confusion.

“The entire thing happened not because of any illogicality in the step but due to the communication gap,” Adhia said at an interaction on Budget at the Ahmedabad Management Association here.

“In the budget we try to concise the speech by minimising the words. If it goes beyond 1 hour and 30 minutes it becomes boring. When we were reducing the number of words and when it came to this paragraph we chopped it off and that is how the problem occurred,” Adhia said.

“If we had paraphrased this paragraph differently then less confusion would have been created.”

The government has in fact continued with the policy of exempting EPF at all three stages (entry, during the scheme and exit), he argued.

“We have not said that we will be taxing remaining 60 per cent (of withdrawn EPF). The first 40 per cent is totally exempt. Regarding remaining 60 per cent the expectation is you should put it in some pension scheme….To encourage people to put their money in pension products we have said if you put the remaining 60 per cent in annuity scheme it will not be taxed….original corpus after your death will go to your heir and that will also be tax exempt,” he said.

“So in a way we have continued exempt, exempt, exempt scheme, but with a time period,” he said.

“We do not wish to get anything out of this, it is not a revenue mobilisation effort,” Adiha said.

“The Finance Minister has already said that he will make the announcement on it in a very short time (in Parliament)”, he noted.

The government could not raise the Income Tax exemption limit as when it was raised the last time from Rs 2 lakh to 2.5 lakh, it lost some 40 lakh tax payers, he said to another question.

PTI

Employees can withdraw EPF money without employers permission

Now, employees can withdraw EPF money without employers’ permit

Employees can avail the benefit if details such as Aadhaar number and bank account number have been linked to the EPF UAN and their KYC verification has been done by the employer

New Delhi: Employees will no longer need the approval of their employers to withdraw money from their Employees Provident Fund (EPF) corpus.

If details such as Aadhaar unique identity number and bank account number have been linked to the EPF universal account number (UAN) and their know-your-customer (KYC) verification has been done by the employer, then the employees can avail themselves of the benefit of this hassle-free initiative immediately, the Employees Provident Fund Organisation (EPFO) said on Tuesday.

The state-run retirement fund manager also issued an order on Tuesday to all its field offices across India, instructing them to give effect to the order immediately.

In its quest to make EPFO a more subscriber-friendly organization, the retirement fund manager had delinked the employer from the process, central provident fund commissioner K.K. Jalan said.

Currently, employees need the approval of their employers to withdraw their EPF corpus, leading to unwanted delays on occasion.

Many employees have complained to the EPFO that organizations at times use their approval powers as a tool to harass them.

“Employees whose details like Aadhaar number and bank account number have been seeded into their UAN and whose UAN has been activated, may submit claims in Form 19, Form l0C and Form 31 directly to the commissioner without attestation of their employers, in such form and manner as may be specified by the central provident fund commissioner, for fast settlement of claims,” the EPFO order dated 1 December said.
Since October 2014, the government has allowed EPF number portability through UAN.

All active EPF subscribers have been allotted a UAN which needs to be linked to his Aadhaar and bank account numbers.

The employer verifies the details and approves the KYC details through a digital signature.

But in the past one year, not all EPF subscribers have activated their UAN on the EPFO portal, largely due to three key reasons—lack of awareness, pending KYC and lack of digital signature.

Of the over 40 million active subscribers, only 21 million have activated their UAN, as per data available with the labour ministry.

EPFO authorities said the simplified withdrawal process will work as a catalyst to persuade more employers to get their KYC done and activate their UAN.

“As a retirement fund body, we are now focusing on our subscribers. We are turning subscriber-friendly and hope more people can take benefit from it,” said Jalan, adding that as the corpus and the subscriber base grows, EPFO will continue to adopt new practices.

EPFO has a corpus of more than Rs.8 trillion—Rs.6 trillion directly under it and another Rs.2 trillion with exempted trusts and company trusts who manage their own EPF under the direct supervision of the EPFO. The corpus has been growing by 15% every year for the last couple of years.

Sharad Patil, secretary general of Employers Federation of India, said that the move looks “logical”. “If the withdrawal happens through Aadhaar and bank account, it will reduce the settlement period and also cut down the chance of corruption in the EPFO,” Patil said.

Source: Livemint.com

Coverage of all construction workers under the ambit of Employees Provident Funds and Misc. Provisions Act, 1952

Centre move to bring all construction workers under EPFO

The Additional Provident Fund Commissioner has sent a circular to all regional PF offices instructing them that senior officials should visit construction spots, including roads, bridges, pipeline, railway line, buildings and enrol the workers for the benefit of the scheme.

EMPLOYEES' PROVIDENT FUND ORGANISATION

(Ministry of Labour & Employment, Govt of India)

Head Office

Bhavishya Nidhi Bhawan, Bhikaji Cama Place, New Delhi - 110 065

No. C-III/110001/4/3(71)Misc./2013/DL/

Dated: 15.10.2015 

To
All Regional PF Commissioners,
In-charge of Regional /Sub Regional Offices

Subject: Coverage of all construction workers under the ambit of Employees Provident Funds and Misc. Provisions Act, 1952.

Sir,

May please refer to Head Office Circular No. C-III/ 110001/4/3(71) Misc /2013/DL/12802 dated 08.10.2013 (Place at Sl. No.428) and Circular No CIII/110001/4/3(71)Misc/2013/DL/34862 dated 22.01.2015 CPFC has also sent e-mails on the subject. The issue has also been discussed in various meetings held at Zone level and attire Head Office level and instructions have also been given vide those minutes.

2. A latest letter from the Secretary, Ministry of Labour & Employment addressed to the CPFC is enclosed. It emphasize on the coverage of all the Building & Other Constructions Workers to ensure that this coverage is complete. The following should be done immediately.

(i) Meetings should be held with Central Public Sector Undertakings which are functioning under your area in one or other way to ensure that all workers employed in the construction work are registered under UAN. Minutes of the meeting should be uploaded on the website and should be sent on email of CPFC as well as on the email of ACC(Compliance)

(ii) Meeting should be held with State PSUs and State Department so ensure that all coverage of through construction workers takes place in respect of the workers working in these PSUs or departments including those deployed through contractors / sub-contractors. Minutes of these meetings be uploaded on the website and should be sent on email of CPFC as well as on the email of ACC(Compliance). 

(iii) Meetings with all the Trade Unions representatives should be held to deliberate on the issues of coverage of construction workers and action should be taken as per law on the suggestions made by the union representatives. The minutes of the meetings and action taken report be uploaded on the website and should be sent on email of CPFC as well as on the email of ACC(Compliance). 

(iv) All construction sites which are located in your regions/sub- regions be visited. Photographs be taken, especially when the work is going on. This must be done in respect of the buildings where the area being constructed is 10,000 sq.ft. or more and in respect of other construction works also such as road, railways, laying pipe-lines, bridges etc;. A library of such photographs should be maintained invariably and EPFO Head Office will come up with a website for keeping track of these photographs. Therse photographs are not for the sake of photographs but for coverage of all workers which are working on these sites. 

(v) You were directed through an earlier circular that you should guide all the employers having more than 500 or more workers which are engaging staff on outsourcing basis. The meetings of such employers having more than 500 employees in your zone should also be held and minutes of such meetings be uploaded on the website.

3. Principal employers be made liable to ensure compliance in respect of construction / other contractual workers deployed by them through contractors / sub contractors. It may also be impressed upon the principal employer that merely giving code numbers of contractors will not be suffice. To ensure compliance of construction workers engaged through contractors / sub contractors, they should not only ensure separate ECRs containing PF account numbers of their workers burt also copies of wages salary register and attendance register. Remittances of PF and ECRs should be verified by Principal employers from EPFO's website before releasing the bills to avoid manipulations / misappropriation of PF dues b'y their contractors / sub contractors.

4. Principal employers should also be advised to mention PF account number and UAN number on I-card of each worker. UAN numbers of all workers be got activated so that the workers can get their E-pass books and even know about deposit of PF by contractors lat month alongwith PF balance just by giving a missed call from registered mobile.

5. For the purpose of aforesaid inspections standing permission is granted and matter should not be referred to seek permission from CAIU at Head Office.

6. Action on these above points should be taken and a monthly report should be sent as to how much coverage of employees increased in your area. It needs to be ensured that such workers get the UAN so that he is entitled for portability benefits. Monthly report be submitted by 15th of the following month in enclosed performa by e-mail in excel format 

(This issues with the approval of CPFC)

Yours faithfully,

(K.L. TANEJA)

Addl. Central PF Commissioner-I (Compliance)

Source:http://epfindia.gov.in/site_docs/PDFs/Circulars/Y2015-2016/C3_Coverage_ConstructionWorkers_27618.pdf

Premature Provident Fund withdrawal – Income tax will be imposed

Premature Provident Fund withdrawal – Income tax will be imposed

Income Tax for Premature Provident Fund withdrawal of more than Rs.30,000

The Government has announced that income tax will be imposed if, at the time of premature withdrawal, the Provident Fund amount is in excess of Rs.30,000.

Finance Minister brought a new provision in his budget that allows for TDS on Provident Fund withdrawal before five years of continuous service. When calculating the period of continuous service of five years, the previous employment can also be included. The intention of this at promoting long-term savings. The amendment will come into force from June 2015.

“Taxes will be imposed if, at the time of closing or transferring the PF account, the amount is in excess of Rs.30,000, and, if the employee has been employed in the current job for less than five years. Tax rebates are applicable. In order to claim tax exemption, the person has to submit a copy of his/her PAN card and Forms 15G and 15H, accompanied by a signed and filled up Form 19.

“Failing to do so will attract maximum taxes of up to 34.61%. If the forms are submitted, only 10% taxes will be deducted. Taxes will not be imposed if an old PF account is being converted to a new PF account. If the employee has served for more than five years, then, at the time of closing his account, no taxes will be imposed.

“The PF amount will also not be taxed if the employee is unwell, if the company has closed down, if the employment contract comes to an end, or if the employee loses employment for reasons that cannot be attributed to him/her.”

Source: CGEN.in

Central Government Allows 5% of PF Funds to be Invested in Share Market

Central Government Allows 5% of PF Funds to be Invested in Share Market
 
The Central Government has allowed investing up to 5% of the Provident Fund capital in the stock market. As a result, Rs.5000 crore is expected to be released for investment this financial year. A circular from the Ministry of Labour has confirmed that 5% of the PF amount has been sanctioned for investing in the stock market.

The money will be invested in stock market based EDFs. Mr. Shankar Agarwal, the Secretary of Departmetn of Labour, said that announcements to this regard were made about two or three days ago. Rs.80,000 Crore was the total amount collected in the EPF in the financial year 2014-15. The amount is expected to cross Rs.1 lakh crore before the end of the current Financial Year. The number of persons qualified for EPF, and the amount raised, have increased after the salary limit was raised from Rs.6500 to Rs.15,000.

Agarwal has said that initially only 1% of the EPF reserve was going to be used for investments. This is going to be raised to 5% before the end of the financial year. The Ministry of Finance has suggested that between 5 to 15% of the funds can be invested in the markets. Agarwal added that since it was the first time, they are going to be very cautious and invest only 1% of the funds.

“The money is the sweat and blood of workers. We don’t want to carelessly invest it in the stock market. Hence, we have planned to invest only 5% of the money in the first stage,” he clarified.

He said that the plans are to invest only in EDFs. He added that no decision has been made about percentage of investment aimed at public sector companies. In the past, EPF, which has about 6 crore members, has been investing only in Central Government bonds.

Source: CG Staff News

NPS is more beneficial than EPF

NPS is more beneficial than EPF

Is NPS better than EPF?

The NPS is more complicated than EPF, but it may ensure a sufficient retirement kitty

If there’s one investment option that has received generous tax breaks in the Budget, it is the National Pension System (NPS). In a watershed move, the Finance Minister has also announced that employees in the organised sector will now be able to opt out of contributions to the Employees Provident Fund (EPF) and invest in the NPS instead. So, if given this choice, what should you do? Here’s how they compare.
Contributions

EPF contributions are mandatory for employees earning up to Rs. 15,000 a month in the organized sector. Many employers however insist on EPF contributions for all their employees. The contribution is pegged at 12 per cent of your pay (basic plus dearness allowance). Your statutory EPF contributions are matched by your employer. If you are an employee who usually struggles to save, the EPF is a good option for you as it forces you to save at least 12 per cent of your pay.

Read more at The Hindu Business Line

EPFO Pension Scheme: Age Limit May Be Raised

EPFO Pension Scheme: Age Limit May Be Raised

New Delhi: The Employees’ Provident Fund Organisation’s trustees in a meeting on Thursday will consider a proposal to raise the age limit from 58 to 60 years for vesting of pension under the Employees’ Pension Scheme (EPS-95).

At present, a formal sector worker covered under the EPS-95 can make contributions towards the pension scheme till the age of 58 years and can claim pension after that.

The Pension Implementation Committee (PIC) has recommended an increase in the age for vesting pension to 60 years, while suggesting that the actuary should be asked to develop a model to give incentive to those persons who opt for drawing pension at the age of 60 years.

An actuary analyses financial consequences of risk after studying uncertain future events, particularly of concerns to pension and insurance plans.

Raising the age limit would reduce the deficit in pension fund and would increase the pension benefits of members as there would be two additional years of service, as per the agenda listed for the meeting of the Employees’ Provident Fund Organisation’s apex decision making body – Central Board of Trustees (CBT).
According to a report of the valuer on the scheme, increasing the age limit would reduce the shortfall in the pension fund to the extent of Rs 27,067 crore.

The level of deficit is not a matter of concern, though it is recommended that the retirement fund body should look into investment returns more carefully and not increase benefits without consulting the actuary, and do sensitivity analysis more frequently, the valuer has suggested.

As per the the valuer, appointed by EPFO, net liability or deficit is Rs 10,855 crore as of March 31, 2012, Rs 6,712.96 crores as of March 31, 2013 and Rs 7,832.74 crore as of March 31, 2014.

It is also proposed by the committee to increase the short service pension entitlement age from 50 years to 55 years. This measure would reduce the shortfall in pension fund to the extent of Rs 12,028 crore.

At present, members can ask for fixing pension at attaining the age of 50 years provided they have served for at least 10 years.

It is also proposed that the pensionable salary should be determined on the basis of 36 months average wages immediately preceding the date of exit from the scheme in place of existing 60 months.

It may be noted that there is no bar of any kind for contributing towards other social security schemes run by the Employees’ Provident Fund Organisation (EPFO) – Employees’ Provident Fund Scheme 1952 and Employees’ Deposit Linked Insurance Scheme 1976.

Read at: NDTV Profit

Dedication of Portability through Universal Account Number (UAN) for Employees Provident Fund

Dedication of Portability through Universal Account Number (UAN) for Employees Provident Fund

“The minimum pension for employees has been introduced first time so that employees’ pension is not less than Rs. 1000 per month. The wage ceiling has been raised from Rs. 6500 to Rs. 15000 per month to ensure that vulnerable groups are covered under EPF Scheme”.

Under the scheme complete information for approximately 4 crore subscribers of EPF has been centrally compiled and digitized and a UAN has been allotted to all. The UAN is being seeded with Bank account and Aadhar Card and other KYC details for financial inclusion of vulnerable section of society and their unique identification.

Camps are being organized to facilitate opening of bank account and Aadhar card for those subscribers who have no bank account or Aadhar card as on date. This will ensure portability of the Social Security Benefits to the labour of organised sector across the jobs and geographic areas. The EPF account of employee will be now be updated monthly and at the same time he will be informed through sms.

Finally it will ensure that each of the 4 crore or more EPF account holders have direct access to their EPF accounts and will also enable them to consolidate all their previous accounts (approximately Rs 27000 Crore are currently lying with EPFO in inoperative accounts). By 16th October, 2014, approximately 2 crore subscribers will have the benefit of portability through UAN. Subscribers have been informed through sms/email immediately on inauguration.

The minimum pension for employees has been introduced first time so that employees’ pension is not less than Rs. 1000 per month. The wage ceiling has been raised from Rs. 6500 to Rs. 15000 per month to ensure that vulnerable groups are covered under EPF Scheme.

Source: PIB News

#Employees Pension Scheme, #EPFO, #Provident Fund,  #Employees Provident Fund, #Minimum Pension

Launching of Minimum Pension Scheme (Rs.1000) across 120 locations in India

Labour Minister Shri Tomar announces launch of Minimum Pension Scheme across 120 locations in India

37 Union Ministers to felicitate pensioners on September 30

The Union Minister of Labour & Employment, Steel and Mines, Shri Narendra Singh Tomar announced the launch of a guaranteed minimum pension of Rs 1000 per month under Employees’ Pension Scheme, 1995. Speaking to journalists at a press conference in here today, he said, the Union Government has decided to organize functions in every office of the Employees Provident Fund Organisation spread across 120 locations in the country. It has also been decided that in 37 locations, Union Ministers will preside over the functions and felicitate the pensioners whose pension is getting increased.

Shri Tomar stated that this is being done to interact with the pensioners and to ensure that no eligible person is left out. He expressed confidence that this interaction will help the EPFO to design its pension re-engineering process in a better way. The Secretary, Ministry of Labour and Employment, Smt Gauri Kumar and Central PF Commissioner Shri K.K. Jalan were also present on the occasion.

The Minister said that the long-pending demand for increase in the pension will soon see the light of day. At present, a large number of pensioners are getting only paltry amounts as pension under the scheme. Nearly two-thirds of the pensioners are in receipt of pension of less than 1000 rupees. Thus, this move would benefit approximately 32 lakh out of a total of 49 lakh pensioners who are getting below Rs 1000 as pension, he added.

It is relevant to note that the wage ceiling for coverage under the three schemes of EPFO i.e. Employees Provident Fund Scheme, Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme (EDLI) has also been increased from monthly Rs 6500 to Rs 15000. This increased wage ceiling is expected to bring in an additional 50 lakh employees under the ambit of these social security programmes. The increased wage ceiling will also result into higher benefit under the EDLI from a maximum of Rs.1,30,000 to a maximum of Rs 3,60,000.

In the recent past EPFO has taken a series of measures to bring in greater transparency and efficiency in its functioning. These include the facility for online registration of establishments (OLRE), Online Transfer Claim Portal (OTCP), e-passbook and electronic payment of PF and Pension benefits through NEFT (National Electronic Fund Transfer) and CBS (Core Banking Solution).

PIB

EPFO trustees may decide on 8.5% interest rate today i.e. 13th Jan, 2014

EPFO trustees may decide on 8.5% interest rate today i.e. 13th Jan, 2014

 The meeting is being held nearly a year after the last in February 2013.

“There are 38 items on the agenda, including approval of the annual report, as the meeting is taking place after so long,“ said a CBT member, adding that after the board’s reconstitution in May 2013, it was meeting only now.

The CBT is headed by the Labour Minister. However, this fiscal, the Labour Ministry has seen a change of three Ministers — from Mallikarjun Kharge to late Sis Ram Ola and Oscar Fernandes now, who has been given additional charge of Surface Transport.

Contributions

In 2012-13, the total contributions received by the Employees Provident Fund Organisation (EPFO) from its 8.87-crore subscribers stood at Rs 77,000 crore. The investment corpus, as of end March 2013, stood at Rs 6,32,159 crore.

With retail inflation hovering around 11 per cent, trade union representatives in the tripartite body said they would press for a higher interest rate this year.

Union demand

“We will demand 9.5 per cent for this fiscal,” D.L. Sachdeva, Secretary, All India Trade Union Congress and CBT member, told Business Line.

Once the trustees approve the interest rate, it has to be cleared by the Finance Ministry, which then notifies it, after which the interest is credited to the accounts of subscribers.


Source: Hindu BusinessLine
[http://www.thehindubusinessline.com/economy/epfo-may-keep-interest-rate-on-pf-deposits-at-85/article5569910.ece]

EPFO to decide PF interest rate on January 14

EPFO to decide PF interest rate on January 14

Retirement fund body Employees' Provident Fund Organisation (EPFO) will announce the interest rate on provident fund (PF) deposits for the current financial year on January 14 and may offer its over 5 crore subscribers a little more than 8.5 per cent provided in 2012-13.

"The decision on interest rate on PF deposits for this fiscal is pending for long and a decision would be taken by the board in the next meeting," said Central Provident Fund Commissioner KK Jalan. A decision on the interest rate could not be taken as the Central Board of Trustees has not met after it was reconstituted in May.

Source: http://www.indianexpress.com
[http://www.indianexpress.com/news/epfo-to-decide-pf-interest-rate-on-january-14/1210386/]

Enhancement of salary limit of Employees Provident Fund

Enhancement of salary limit of Employees Provident Fund

 

Enhancement of salary limit of Employees Provident Fund is considering to Rs.15000..!

 

While answering to a question in Parliament, Minister of State for Labour and Employment Shri Kodikunnil Suresh said that A proposal for enhancing the wage ceiling from Rs. 6500/- to Rs. 15000/- and reducing the threshold limit from 20 to 10 under the Employees Provident Funds & Miscellaneous Provisions Act, 1952 are under consideration of the Government.

 

A proposal for providing a minimum pension of Rs. 1000/- to member pensioners under Employees’ Pension Scheme, 1995 is also under consideration of the Government.

 

Source : CGEN.in

[http://centralgovernmentemployeesnews.in/2013/12/enhancement-of-salary-limit-of-employees-provident-fund/]